Business process outsourcing in the Philippines

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Business process outsourcing or BPO is a growing industry in the Philippines. In 2011 the Philippines was the country with the highest number of employees at call centers, with about 400,000.[1]

Overview[edit]

The business process outsourcing industry in the Philippines has grown 46% annually since 2006. In its 2013 top 100 ranking of global outsourcing destinations, Tholons, a US-based strategic advisory firm for global outsourcing and investments, has ranked the Philippine capital Manila number 3, lifting it 1 notch to knock off India’s New Delhi from number 3 spot in 2012 to number 4 in 2013. The top spots remained unchanged, ranking Bangalore 1 and Mumbai 2.[2] This boom is led by demand for lower labor costs, a highly skilled and educated work force, and high proficiency in spoken English. Industry estimates from the Board of Investments, Business Process Association of the Philippines (BPA/P) and BPO Services Association (BSA/U) put the number of people employed by the BPO sector by end of 2008 at 435,000 (vs 372,000 in 2007)- excluding the non-BOI/ non-PEZA entities.

In 2012, IT-BPO in the Philippines generated more than $13 billion in revenues, an increase of $2 billion from the $11 billion in 2011. The Business Processing Association of the Philippines (BPAP) now projects that revenues of the IT-BPO industry will hit $16 billion in 2013 and have 926,000 full-time employees.[2] To achieve and sustain this growth, the Philippine government offered fiscal and non-fiscal incentives to attract foreign direct investment in these industries as part of its 2007 Investment Priorities Plan (IPP). The IPP was prepared by the Board of Investments (BOI), as the lead agency in promoting investments, focused on the sectors identified in the Medium-Term Philippine Development Plan (MTPDP) 2004-2010 (PBOI 2006).

The majority of the BPO facilities are located in "first-tier" cities in Metro Manila and Metro Cebu. Second- and third-tier sites are located in regional economic zones such as Bacolod City, Baguio City, Cagayan de Oro, Clark (Angeles City), Dagupan City, Davao City, Tacloban City, Dumaguete City, Lipa City, Iloilo City, Naga City, Iriga City, Iligan City, Olongapo City and Urdaneta City.

The low cost BPO industry has come under threat due to steadily-appreciating local currency.[3] Philippines is now 30 per cent more expensive than India due to a 30-per cent difference in peso and Indian rupee exchange rates with the US dollar.

Call Center Industry in the Philippines[edit]

In the Philippines, call centers began as providers of business email response and managing services. The call center sector comprises 80% of the total BPO industry in the country. With 80% of the call services provided for the US market.

Growth of the call center industry in the Philippines can be written up to the lower operational and labor costs relative to the US, the high proficiency in spoken American-style English and idioms (the Philippines was a former US colony and English is the language of instruction in schools), a constant stream of college-educated applicants, and a highly skilled and an overall motivated workforce among a host of other tangible outsourcing benefits. In 2008, call centers supported a $12-billion BPO industry.

Legal and medical transcription[edit]

Medical transcriptionist

These companies do mostly medical reports, discharge summaries, operative reports, therapy/rehabilitation notes, chart notes, and hospital and clinic reports using software and equipment for the U.S.

In 2003 there were only 9 companies registered doing medical transcription in the Philippines. In 2008 there were 43 companies registered.

Finance, logistics and accounting[edit]

The Philippines is becoming a regional and global hub for shared services center corporate backroom operations, especially for financial services such as accounting and bookkeeping, account maintenance, accounts receivable collection, accounts payable administration, payroll processing, asset management, financial analysis and auditing, management consulting, inventory control and purchasing, expense and revenue reporting, financial reporting, tax reporting, and other finance-related services such as financial leasing, credit card administration, factoring and stock brokering; as well as for logistics management, and cargo shipment management.

Software Development and Animation[edit]

Fueling the recent growth spurt in the outsourcing industry in the Philippines are more higher-end outsourcing services such as Web design, software development, and animation (Shameen 2006).

Filipino animators do well in the global market for animation, which is growing due to the increasing popularity of animation as an entertainment medium not just for free and cable TV and the movies but also for computer games, as well as an advertising medium, a graphics medium for Internet content, and an information and educational tool.

Major studios like Disney, Marvel, Warner Brothers and Hanna Barbera have offices in the Philippines (CNN 1995). Some of the latest works of Filipino animators include scenes in Pixar's Finding Nemo, Paramount Picture's Barnyard and Twentieth Century-Fox's Anastasia (ABS-CBN Interactive 2004).

See also[edit]

References[edit]

  1. ^ "New York Post: Philippines is the New Capital of Call Centers". Good News Pilipinas. 2 February 2012. Retrieved 30 June 2012. 
  2. ^ a b "Manila takes No 3 slot in BPO ranking". Investvine.com. 2013-02-21. Retrieved 2013-02-21. 
  3. ^ "Strong peso hurts Philippine call centers". Investvine.com. 27 December 2012. Retrieved 17 January 2013. 

Sources[edit]